Want to see ESAB full AI Analyst Report?
Top Page
ESAB Corporation
(NYSE:ESAB)
Select Model
Select Model
Rating:64Neutral
Price Target:
$72.00
▼(-10.51% Downside)
Action:Reiterated
Date:08/07/26
ESAB scores as moderately attractive: solid underlying profitability but pressured by higher leverage and cooling earnings/free-cash-flow momentum. The raised FY2026 outlook and strategic Eddyfi acquisition support the rating, while technicals remain mixed (rebound signals but still below longer-term averages) and valuation looks demanding with a low dividend yield.
Positive Factors
Recurring consumables revenue
Consumables used in ongoing production and maintenance create repeat purchasing beyond one-time equipment sales. This replenishment model can improve revenue resilience across industrial cycles and supports durable customer relationships through ESAB’s fabrication product ecosystem.
Negative Factors
Higher leverage reduces flexibility
The step-up in debt increases ESAB’s sensitivity to interest rates and cyclical industrial demand. Higher leverage can constrain capital allocation, reduce flexibility during weaker operating periods, and make future acquisitions or reinvestment more dependent on sustained cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring consumables revenue
Consumables used in ongoing production and maintenance create repeat purchasing beyond one-time equipment sales. This replenishment model can improve revenue resilience across industrial cycles and supports durable customer relationships through ESAB’s fabrication product ecosystem.
Read all positive factors
ESAB Corporation (ESAB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.16B
Dividend Yield0.66%
Average Volume (3M)1.00M
Price to Earnings (P/E)24.5
Beta (1Y)1.21
Revenue Growth9.65%
EPS Growth-33.80%
CountryUS
Employees10,300
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)2.73
Shares Outstanding62,167,810
10 Day Avg. Volume1,218,260
30 Day Avg. Volume1,004,139
Financial Highlights & Ratios
PEG Ratio-2.05
Price to Book (P/B)3.14
Price to Sales (P/S)2.40
P/FCF Ratio31.92
Enterprise Value/Market Cap1.99
Enterprise Value/Revenue2.75
Enterprise Value/Gross Profit7.71
Enterprise Value/Ebitda17.41
Forecast
1Y Price Target
$127.43Price Target Upside58.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)5.44
Revenue Forecast (FY)$3.06B
ESAB Corporation Business Overview & Revenue Model
Company Description
ESAB Corporation specializes in the creation, production, and distribution of industrial consumables and advanced equipment for cutting, joining, and automated welding processes, in addition to gas control systems. Their extensive catalog features...
How the Company Makes Money
ESAB makes money by selling fabrication technology products—primarily welding and cutting equipment and the consumables that are used with that equipment—through a mix of direct sales and distribution channels. A significant portion of the busines...
ESAB Corporation Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook: ESAB reported record Q2 sales and adjusted EBITDA, returned to organic growth across segments, completed the strategic Eddyfi acquisition (with attractive margins and a sizable funnel), and raised full-year guidance. Near-term headwinds include transitory margin pressure from logistics and commodity inflation, Middle East disruptions, acquisition-related EPS dilution and integration costs. Management characterized many negatives as temporary, emphasized investments to drive future organic growth and margin expansion, and expects improving sequential pricing and strong 2027 leverage from Eddyfi and equipment mix changes.Positive Updates
Record Quarterly Sales and Organic Growth
Total sales of $766 million in Q2, up 13% year-over-year, with core organic growth of 2.5% driven by double-digit growth in automation and equipment.
Negative Updates
Near-Term Margin Pressure from Price/Cost Neutrality
Reported a 90 basis point year-over-year decline in adjusted EBITDA margin attributed to transitory price/cost neutrality driven by higher logistics and commodity costs; management expects correction over the next few quarters and assumed ~$15 million FY drag in guidance.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Sales and Organic Growth
Total sales of $766 million in Q2, up 13% year-over-year, with core organic growth of 2.5% driven by double-digit growth in automation and equipment.
Read all positive updates
Company Guidance
ESAB raised its full‑year 2026 outlook to total core sales of about $3.0–$3.1 billion (organic growth 2–4%, acquisitions contributing ~9 points, FX unchanged), adjusted EBITDA of $615–$625 million (includes seven months of Eddyfi and assumes roughly $15 million of transitory price/cost drag), and adjusted EPS of $5.40–$5.50, with expected free cash flow conversion around 90%. Management noted Q2 results that underpin the guide—Q2 sales $766 million (up 13% y/y, 2.5% core organic growth), adjusted EBITDA $150 million (up 8% to a 19.5% margin, down ~90 bps y/y)—and highlighted the Eddyfi acquisition (high‑single‑digit organic growth, ~65% gross margin, ~30% EBITDA margin) as modestly dilutive in 2026 but accretive in 2027. They also disclosed financing effects: core adjusted EPS excluding one month of Eddyfi was $1.41, the March $1.0 billion bond prefunding and related debt financing reduced EPS by $0.13 this quarter (with $0.03 from prefunding) and committed equity/mandatorily convertible preferred stock created a ~$0.03 headwind.ESAB Corporation Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
60
Neutral
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.00B | 2.84B | 2.74B | 2.77B | 2.59B | 2.43B |
| Gross Profit | 1.07B | 1.01B | 1.04B | 1.02B | 885.53M | 837.98M |
| EBITDA | 474.22M | 491.67M | 531.60M | 509.37M | 436.28M | 406.13M |
| Net Income | 172.52M | 226.77M | 264.84M | 205.28M | 223.75M | 235.11M |
Balance Sheet | ||||||
| Total Assets | 6.56B | 4.77B | 4.03B | 3.83B | 3.75B | 3.46B |
| Cash, Cash Equivalents and Short-Term Investments | 217.49M | 185.86M | 249.36M | 102.00M | 72.02M | 41.21M |
| Total Debt | 2.42B | 1.43B | 1.16B | 1.12B | 1.31B | 109.24M |
| Total Liabilities | 3.98B | 2.55B | 2.23B | 2.18B | 2.37B | 959.53M |
| Stockholders Equity | 2.54B | 2.17B | 1.77B | 1.61B | 1.35B | 2.46B |
Cash Flow | ||||||
| Free Cash Flow | 196.61M | 213.28M | 303.62M | 282.32M | 174.12M | 215.15M |
| Operating Cash Flow | 258.87M | 260.57M | 355.40M | 330.49M | 214.36M | 250.74M |
| Investing Cash Flow | -1.88B | -479.88M | -205.70M | -62.24M | -184.42M | -35.27M |
| Financing Cash Flow | 1.58B | 113.70M | 31.67M | -219.72M | 7.56M | -221.57M |
ESAB Corporation Technical Analysis
Negative
80.46
Price Trends
75.76
Negative
83.44
Negative
96.63
Negative
Market Momentum
-2.00
Negative
43.21
Neutral
28.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESAB, the sentiment is Negative. The current price of 80.46 is above the 20-day moving average (MA) of 67.68, above the 50-day MA of 75.76, and below the 200-day MA of 96.63, indicating a bearish trend. The MACD of -2.00 indicates Negative momentum. The RSI at 43.21 is Neutral, neither overbought nor oversold. The STOCH value of 28.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESAB.
ESAB Corporation Risk Analysis
ESAB Corporation disclosed 40 risk factors in its most recent earnings report. ESAB Corporation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ESAB Corporation Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $75.22B | 23.95 | 101.74% | 2.48% | 4.30% | -3.22% | |
78 Outperform | $18.28B | 33.31 | 17.59% | 1.04% | 7.02% | 24.24% | |
72 Outperform | $121.39B | 33.29 | 25.11% | 0.79% | 8.31% | 4.96% | |
70 Outperform | $1.79B | 19.76 | 22.00% | 0.11% | 4.27% | 8.45% | |
64 Neutral | $4.16B | 24.49 | 7.66% | 0.66% | 9.65% | -33.80% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
43 Neutral | $44.92M | -0.77 | 2279.46% | ― | -11.00% | -445.02% |
* Industrials Sector Average
ESAB
ESAB Corporation
66.85
-48.32
-41.95%
EPAC
Enerpac Tool Group
34.93
-4.56
-11.54%
ITW
Illinois Tool Works
264.13
25.76
10.81%
NDSN
Nordson
328.17
100.49
44.13%
PH
Parker Hannifin
962.56
239.92
33.20%
LASE
Laser Photonics Corp.
0.74
-3.36
-81.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.